Post New

The judge managing the bankruptcy case of cryptocurrency lender firm Celsius has ruled the assets in the accounts of Celsius customers don't actually belong to those customers. They belong to Celsius. Why? Because those are the exact terms and conditions the customers accepted online when they created their accounts and deposited their money, which has now become "other people's money." The decision is gigantic -- over $4.2 billion dollars are involved in the customer accounts.

Again, the writing SHOULD have been on the wall for these "customers." A lending institution that figured out how to return you 20% interest? That means THEY have to be earning MORE than 20% from THEIR borrowers to be making money. In an economy where 2-5 percent interest rates are the norm and inflation is 6-8 percent.

Just another reminder that if you want to be all "stick it to the man" and anti-regulation about the economy and your finances, you better spend some serious time reading the fine print before clicking Accept and you better have a damn good idea of the other "man" that you're dealing with. Believe it or not, there are a lot of people out there who are worse than your traditional central banker.


WTH

...the writing SHOULD have been on the wall for these "customers."

Indeed. Couple things here. One is if a deal is that good, it probably isn't: preferred stocks with a market price at too deep a discount to par, Munis and bank CDs at too high a rate compared to market rates, "this deal won't last!", etc.

And: with Celsius the writing was literally on the wall for anyone who chose to read it: the exact terms and conditions the customers accepted online when they created their accounts and deposited their money....

The fine print is deadly dull, but that's where the devil's details hide out.

Eric Hines

Here's a couple of links to news articles regarding this ruling:

https://www.washingtonpost.com/technology/2023/01/...
https://www.reuters.com/business/finance/us-judge-...

Term and conditions available here:

https://web.archive.org/web/20230108125650/https:/...
https://archive.ph/8HGxZ

It's interesting that even media reporting on this seems to find it too much of a hassle to read and quote the terms and conditions. :)

If our Earn Service is available to you, upon your election, you will lend your Eligible Digital Assets to Celsius and grant 
Celsius all rights and title to such Digital Assets, for Celsius to use in its sole discretion while using the Earn Service.
[...]
Once such Eligible Digital Assets are received by Celsius into your Earn balance, they shall be Celsius' property, 
in every sense and for all purposes, and you will immediately start accruing Rewards on such Digital Assets [...]
[...]
You agree and acknowledge that you are exposed to the possibility that Celsius may become unable to repay its obligations to 
you in part or in full, in which case any Digital Assets in your Celsius Account that are not using the Custody Service may 
be at risk of partial or total loss.
[...]
In the event that Celsius becomes bankrupt, enters liquidation or is otherwise unable to repay its obligations, any 
Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable, and you may not 
have any legal remedies or rights in connection with Celsius' obligations to you other than your rights as a creditor of Celsius 
under any applicable laws.

...seems to be relevant parts. So, there are two cases, and in the latter you basically decided to lend your assets in exchange for a paper that says IOU.

Post New

Macroeconomic Trends and Risks FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.